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Update on Litigation Privilege – Important lessons to be learnt

In recent months we have seen a number of significant judgments regarding the scope of protection offered to litigants by legal privilege. In this article we discuss the effect of those decisions and highlight some of the issues that parties should be aware of.

Privilege is a fundamental legal right, the underlying basis for which is the principle that an individual or corporate should be able to seek legal advice from a lawyer without being concerned that those discussions will be made public. Once established, privilege gives a party an absolute right to withhold materials from disclosure to a third party or the court. In recent decisions the court has, however, increasingly sought to narrow the circumstances in which privilege can attach.


Following receipt of a whistle-blowing email alleging corruption within one of its wholly-owned subsidiaries ENRC instructed solicitors and forensic accountants to conduct internal investigations. The SFO requested that ENRC disclose copies of documents generated in these internal investigations. ENRC asserted both litigation privilege[2] and legal advice privilege[3] over the documents and refused to provide them. On appeal, the Court of Appeal held that the documents sought by the SFO were covered by litigation privilege. Key lessons to learn from the decision are that:

  1. Legal advice given to head-off, avoid or settle reasonably contemplated proceedings is as much protected by litigation privilege as advice given for the purpose of resisting or defending contemplated proceedings.
  2. A review of interviews and books and records as part of a fact-finding process carried out at a time when proceedings were in reasonable contemplation and for the dominant purpose of resisting or avoiding that prosecution are likely to be subject to litigation privilege.
  3. It is to be regarded as in the public interest that companies should be prepared to investigate allegations from whistle-blowers or investigative journalists prior to prosecution without losing the benefit of privilege – failing to allow privilege in these circumstances may lead to companies not investigating, for fear of being forced to reveal what they had uncovered.

Further analysis of this decision can be found here.

WH Holding Ltd v E20 Stadium[4]

West Ham sought inspection of several documents over which E20 had asserted privilege, including emails passing between members of E20’s board and between the board and stakeholders. E20 claimed the emails were protect by privilege because: (1) they had been composed for the dominant purpose of discussing a commercial proposal for settling the dispute when litigation was in reasonable prospect; and (2) litigation privilege covered all internal communications within a company. It was held that:

  1. Litigation privilege did not extend to purely commercial documents created for the purpose of discussing a settlement. Legal advice privilege may, however, apply if those documents were seeking legal advice or information.
  2. There was no justification for covering all internal corporate communications with a blanket of litigation privilege.

FRC v. Sports Direct[5]

The FRC sought disclosure from Sports Direct of certain documents to assist with its investigation into the conduct of an accountancy firm in relation to its audit of the company’s financial statements. Sports Direct refused to comply on the grounds that the documents withheld from FRC were subject to legal advice privilege. The court addressed two separate issues:

  1. Non-privileged documents attached to privileged emails - the court held an existing, non-privileged document does not become privileged because it is attached to an email passing between a client and his lawyer.
  2. Implied waiver of privilege - the court held that Sports Direct did not waive privilege by placing documents in the hands of its auditors.
  3. Infringement – the court held that the provision of information to the FRC for the purposes of a confidential investigation into a regulated person was not an infringement of privilege.

Further analysis of this decision can be found here.

R v Civil Aviation Authority[6]

In judicial review proceedings, the claimant, on the application of Ltd, sough disclosure of various drafts of a letter sent to the claimant after the claimant sent an initial complaint to the CAA. Certain drafts were sent prior to the involvement of the CAA’s in-house lawyers, whilst others were sent to both the in-house lawyers and other employees. The CAA claimed legal advice privilege over those drafts. The court summarised the position as regards legal advice privilege as follows:

  1. The mere involvement of a lawyer is not enough to justify a claim for privilege.
  2. For legal advice privilege to apply, it must be shown that the dominant purpose for sending the communication was to seek legal advice from the lawyer (and to the extent that other employees are copied in, it is for information only).
  3. If the dominant purpose of sending the communication was to seek commercial views, and the lawyer was copied in whether for information or even for the purpose of legal advice, then the copies of the communication sent to the non-lawyers are not privileged.
  4. If the email was sent both to the non-lawyer for commercial comment but to the lawyer for legal advice, then the communications between the non-lawyers will not be privileged unless it or the non-lawyers’ responses disclose or might disclose the nature of the legal advice sought or given.

Further Comment

The selection of judgments discussed above demonstrate what appears to be a narrowing of the range of documents to which a court will grant the protection of legal privilege, albeit evidently the court remains cognisant of the importance of maintaining privilege over documents pertaining to internal discussions and investigations where litigation is reasonably contemplated or legal advice is clearly being sought. This remains, however, a highly technical issue, and as such parties would be well advised to obtain advice at an early stage in order to understand the extent to which privilege may apply and to ensure that privilege is maintained insofar as is possible.

[1] The Directors of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006

[2] Litigation privilege protects communications between clients or their lawyers and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation

[3] Legal advice privilege attaches to confidential communications between a client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice

[4] WH Holding Ltd & Anor v E20 Stadium LLP [2018] EWCA Civ 2652

[5] The Financial Reporting Council Limited v Sports Direct [2018] EWHC 2284

[6] R (on the application of Ltd) v Civil Aviation Authority [2018] EWHC 3364 (Admin)

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